While the cannabis industry has achieved legalization milestones over the past decade that have benefited millions of Americans, an illicit market continues to fuel health problems because of potentially dangerous products and a lack of oversight. It is critical that state and federal officials work closely with the cannabis industry to begin eradicating the illicit market, clear up consumer confusion and curb health problems borne from illicit and unregulated suppliers.
Products obtained from illicit and informal sources continue to dominate the cannabis industry, even in the states that have already fully legalized cannabis; just last year, the illegal cannabis market proved to be nearly seven times the size of the legal cannabis market. While the legal cannabis industry is developing reliable and innovative medical and recreational products that must pass stringent manufacturing rules, a lack of consumer education and enforcement of state rules on the books blur the lines between legal, state-licensed dispensaries and illicit producers of cannabis.
In both Oregon and Washington, for instance, the illicit cannabis market accounted for more than half of cannabis sales in 2019. Yet, even more prominent is the illicit market in Massachusetts, where a BDS analysis found that illicit cannabis made up nearly 90 percent of the sales last year. These thriving illicit markets are a result of the misguided regulations and the lack of oversight of state suppliers. In fact, customers in Massachusetts have complained about long lines and too few legal outlets to purchase cannabis from, which, in turn, incentivizes them to purchase illegal – and potentially unsafe – products instead.
And too often, many consumers may not know they are purchasing from illegal dispensaries. Recent proposals, however, have been put in place that enable consumers to better distinguish products sold on the legal market as compared to the illicit and unregulated products. State officials in California, for example, have introduced a system in which would require legal dispensaries to display a scannable QR code that would allow consumers to confirm the legality of the source. And other states have also implemented measures in an effort to eradicate the illicit market.
However, consumer confusion does not end at a dispensary’s doorstep. The blurry lines between the legal and illicit cannabis market can have serious consequences on public health, which has been seen in the illicit market’s role in driving the recent vaping epidemic. While the Centers for Disease Control has confirmed that illicit products have been linked to an overwhelming majority of pulmonary illnesses, information regarding the sources of tainted products has been vague.
For instance, the CDC has linked a small percentage of vaping-related illnesses to “commercial” sources. But the CDC’s definition of “commercial,” however, is unclear because it includes outlets beyond state sanctioned suppliers such as pop-up shops. In fact, officials in Washington, D.C. recently raided a number of these pop-up shops throughout the city to find illicit and unregulated products being sold to consumers.
By conflating legal and illegal sellers, federal officials are leaving the door open to confusion among consumers about how they can identify regulated and legal commercial cannabis products. It is vital that the CDC provide more clarity to accurately address the ongoing crisis and provide consumers with as much information as possible.
It is no doubt that the impact of the illicit market would be far worse without the prevalence of the regulated market across the nation. Yet more needs to be done to crack-down on illicit producers and instill more confidence in consumers. The best way to address this crisis is for state policymakers and regulators to work closely with legal cannabis producers and suppliers to develop stronger regulations and enforce strict oversight, and for federal officials to clear up confusion around the sources of tainted products.
Nick Etten is a Cannabis Information Project member and vice president of government affairs for Acreage Holdings.